How autonomous vehicles drive technological innovation

As the possibility of autonomous vehicles hitting the roads becomes a reality, companies are scrambling to gain market share in the autonomous driving industry. Investments into autonomous vehicles have doubled in the past year. In the second quarter of 2017, over $1.4 billion dollars have been invested into autonomous vehicle technologies. This data also includes investments into ride-sharing companies like Uber and Lyft that are developing autonomous vehicle technology in-house as well.

Investors are pouring money into various companies developing hardware and software for many different types of vehicles. Over the past two years, we have tracked investments into technology for autonomous cars, trucks, robots, tractors, delivery vehicles, shuttles, and marine vessels. The investment activity not only spans a wide range of vehicle types, but also encompasses different specialties across the value chain in the fragmented autonomous vehicle market.

Software for autonomous vehicles stands out as the biggest magnet for investors. Twenty-eight out of the 82 deals tracked over the past two years were investments into software for autonomous vehicles. This includes machine learning and artificial intelligence software. Zenuity, a developer of software for autonomous driving and driver assistance systems, raised over $120 million in growth equity in January. Machine vision hardware and software, including LiDAR, radar, and other perception solutions, also generated a great volume of deals over the past year – with LiDAR sensors and software dominating this category. Velodyne LiDAR received $150 million in growth equity last August. Additionally, there have been a number of investments into mapping systems and technology. For example, DeepMap, a provider of autonomous vehicle mapping services, received $32 million in series A funding in March. OEM autonomous vehicle companies have also drawn investors. Navya Technologies, developer of a self-driving electric vehicle capable of carrying up to 15 passengers, received over $33 million dollars in Series B funding in October. There have also been a few investments into cybersecurity and simulation systems to test the autonomous vehicle technology.

This growth in autonomous vehicles investment is a global trend that spreads across Asia Pacific, Europe, Israel, and the United States. The large volume of investments being made into self-driving technology also opens the door for different kinds of activity: investments into infrastructure and connected car capabilities. We have tracked three investments into connected car and fleet capabilities over the past year, but we expect to see an increasing deal number as autonomous vehicles become more widely adopted. According to a study done by the U.S. Department of Energy, autonomous vehicles have the possibility to reduce fuel use by up to 56%. This sharp decrease in emissions can only be met if the technology is paired with connected car technology and updated infrastructure.

Connected car capabilities can broaden the dataset of autonomous vehicles, leading to efficient routing solutions. WayCare, developer of technology to use data from freeway sensors, traffic lights, smartphones, and vehicles, is conducting a trial in Las Vegas. The CEO of WayCare claims that a single connected car can provide 200 times more data than all the current road sensors in Las Vegas combined. Connected cars that relay information to each other while also collecting real-time information from updated infrastructure and sensors not only provide convenience for the traveler, but also help to reduce traffic, accidents, and emissions. WayCare is not the only company attracted to Nevada because of the relaxed regulations on autonomous driving. Audi is also exploring the connected car sector with its vehicle-to-infrastructure pilot in Las Vegas. This pilot is possible due to the lack of the regulatory hurdles, along with the half-million dollar upgrades into the traffic lights. In addition, Cisco has partnered with the city to install connected cameras and sensors for real-time traffic and accident data collection.

Nevada, along with other states such as Pennsylvania – the testing location for Uber’s autonomous vehicles – is leading the charge in terms of autonomous vehicle trials and infrastructure updates. This proves to be a window with which we can predict the future of the autonomous vehicle and connected car capabilities in other states and countries. Although there has been a recent increase in investments into autonomous vehicle technology that spans all parts of the value chain, investments into connected car capabilities and infrastructure will likely rise in the near future.